FCMB Bolsters Earnings Performance, Profit Rises

FCMB Bolsters Earnings Performance, Profit Rises

FCMB Group has bolstered its financial year 2021 earnings performance. Nigeria’s tier-2 capital lender profit rises about 7 per cent to N20.89 billion from N19.61 billion, according to its unaudited financial statement.  

Detail of the company’s financial report filled with Nigerian Exchange for the period shows that gross earnings advanced 9.5% to N208.528 billion, rising from N190.439 billion in 2020.

Net interest income, a core component of the group earnings sources witnessed a moderate slowdown, from N90.757 billion to N90.469 billion, a situation attributed to a low interest environment.

In the banking industry, low interest yield on financial assets has reduced the average interest income, a seemingly uncontrollable situation that continues to force operators to rethink revenue models.

Though, FMCB records an uptick in interest income, rising by about 7% from N151.023 billion to N161.581 billion due to its diversified business units which include investment banking, pension and other financial services operations.

According to the group unaudited financial statement, interest payments to providers of funds inched higher by 17.3% in the period to N71.112 billion from N60.625 billion.  

However, net fees and commission income was given a boost, rising significantly from N19.555 billion in the financial year 2020 to N27.932 billion – a combined effect of lower fees and commission expenses and rising income from the same line.

Other revenue sources missed the target, down to N3.037 billion from N10.540 billion 12-months, further worsened by declined net trading income which settled at N6.892 billion after hitting a high at N7.117 billion last year.

FCMB operating expenses rise, driven by increase recorded in payroll cost, general administration expenses and other operational related overhead. Though, impairment booked on credit losses dropped significantly.

Before the group consideration for tax provision, its pretax profit advance printed at N23.926 billion from N21.911 billion 12-month earlier.

FCMB group total asset was expanded to N2.4 trillion from N2.058 trillion in the financial year 2020, helped by improved loans and advances to customers that were supported by on-lending facilities from investors.

Read: FCMB says group will diversify earnings from retail, raise Tier-2 Capital

Detail analysis later